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Much has been said about the massive amount that Tesla Inc. has invested in bitcoin, a speculative asset that has only been around since 2009.
Read: Why did Tesla buy bitcoin?
However, early estimates from prominent tech analyst Dan Ives show that the electric vehicle maker, led by outspoken CEO Elon Musk, is already making a digital paper profit of at least $ 1 billion. as the asset’s price hits record highs. .
“Based on our calculations, we estimate that Tesla has so far made around $ 1 billion in profits over the past month … To put that into perspective, Tesla is on a path to get more from its investments. Bitcoin as profits from the sale of its [electric vehicle] cars in 2020, ”wrote prolific Wedbush analyst Dan Ives in a note released Saturday afternoon.
Earlier this month, Tesla Inc. TSLA,
has become the latest and most well-known of the major corporations to take a stake in Bitcoin, underscoring the growing acceptability of crypto. The Palo Alto, Calif., Based company on February 8 in a public repository said it had purchased $ 1.5 billion worth of BTCUSD bitcoin,
and that it expects to start accepting payment in cryptocurrency for its products in the future.
Tesla’s decision to invest in bitcoin was seen as further confirmation of the legitimacy of the nascent asset that did not exist until about 12 years ago.
On Friday, the price of bitcoin hit a record high of around $ 54,000 and surpassed a total market valuation of $ 1 trillion, further strengthening the perception of crypto as a legitimate, if not nascent, asset.
Check: Will Bitcoin hit $ 100,000 in 2021 or is its price ‘unsustainable’?
A single bitcoin on Saturday extended its gain to a record $ 57,492, according to CoinDesk. Bitcoin prices have risen by over 90% so far in 2021, according to FactSet data. By comparison, GC00 gold,
considered a rival to bitcoin, is down about 6% in 2021. Meanwhile, the Dow Jones Industrial Average DJIA,
has gained nearly 3% so far in the year, the S&P 500 SPX index,
climbed around 4% and the Nasdaq COMP Composite Index,
grew 7.7% over the same period.
By the way, Tesla’s stock has climbed more than 11% since the start of the year.
The Wedbush analyst said it was not clear whether Tesla’s Bitcoin move was a hit, aligned with Musk’s perception as an iconoclast, but still thinks it’s likely that others companies will be forced to do the same and exchange some of their money for bitcoins in the future.
“We still expect less than 5% of SOEs to go down this path until more regulatory target positions are put in place around the crypto market, which is clearly starting to be embraced. by the general public in 2021 and we believe it will have a seismic impact for blockchain, payments, banking and semi-finished products in the years to come, ”Ives wrote.
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